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The Oregon Public Utility Commission on Tuesday approved Portland General Electric’s plan to raise rates for data centers by nearly 30%, leaving the proposal little changed after a month-long review.
The new rates, which take effect Wednesday, implement Oregon’s POWER Act, a new law that aims to ensure large, energy-hungry industrial users bear more of the costs incurred to meet their rapidly growing demand rather than passing those costs on to households and small businesses.
The Commission put PGE’s proposed rate hike on hold in early June after flagging problems in the utility’s filing and concluding the complex proposal needed additional review.
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The corrections PGE filed in recent weeks were largely technical in nature, according to the utility and a report by commission staff. PGE’s spokesperson Ben Morris said the changes resulted in a minor increase to the new data center customer rates – 29.7% compared to 29% in the initial proposal. The 1.3% residential rate decrease PGE initially proposed remains unchanged, Morris said.
Smaller businesses would also see slightly lower rates. PGE serves about 963,000 customers in Oregon.
“We are confident this new rate structure… will allow us to support economic growth for Oregon while ensuring the customers driving growth on the system pay their share,” Morris said.
Bret Stevens, a senior economist with the commission, said the changes will result “in just and reasonable rates.”
The commission did not move forward with a request from the Alliance of Western Energy Consumers to again suspend the rate implementation and conduct a formal hearing on PGE’s filing to determine whether the resulting rates are “fair, just and reasonable.” The alliance said it asked for another suspension because revisions made by PGE were so extensive they should qualify as a general rate case.
Commission chair Letha Tawney said she was “comfortable with the amount of review” already done and did not think “customers are served by further delay on this decision.”
The commission’s ruling may not be the last word on the matter.
“We’re expecting the data centers to appeal,” said Bob Jenks, executive director of the Citizens Utility Board, a nonprofit watchdog that advocates for utility customers in the state.
“I’m sure the data centers won’t be happy with this rate hike. But it is what is right for Oregonians,” Jenks said at a press conference on the rate hikes last Thursday in Salem.
The new rates primarily affect data centers operating in Hillsboro, which is in PGE’s service territory. Major data centers operating there — Flexential, Stack Infrastructure, QTS, NTT and Digital Realty Trust — did not immediately respond to requests for comment.
Gov. Tina Kotek hailed the new law at last week’s press conference, saying data centers should pay their “fair share” of meeting their electricity demands so the burden doesn’t fall on families and small businesses.
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“Oregon is experiencing an unprecedented growth in electricity demand driven in large part by the rapid expansion of data centers and other very large industrial customers,” Kotek said. “These facilities can consume as much electricity as a small city.”
The governor has suggested Oregon should consider additional steps to protect consumers and the environment as the industry grows. She has not specified what those steps could be but has recommended new data center projects should be on hold until her Data Center Advisory Committee settles on proposed reforms later this year.
Other states are also considering measures similar to Oregon’s POWER Act. Most of these reforms are still in the discussion phase.
Gosia Wozniacka is a politics and environmental reporter focused on how policy decisions shape people and places across Oregon. She covers state and city politics — including environmental challenges and... more
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